Week in Review for June 9, 2018

BUDGETFY19 budget passed with bipartisan support and signed into law. On Monday, Gov. Bruce Rauner signed into law a $38.5 billion bipartisan compromise budget that holds the line on taxes, increases funding for education, curbs spending, and creates a new adoption tax credit that will make it less costly for Illinois parents to adopt children.

“For the first time in years, we have an opportunity to manage our way into balance, and we don’t have to dip into the pockets of overtaxed Illinoisans to do it,” Rauner said. “Balance is in reach because we were able to accomplish $445 million of pension reform and the economy is stronger thanks to federal tax reform, and we are benefiting from an unexpected boost in tax receipts.”
“I’m signing this legislation because it is a step in the right direction, but it is not perfect,” he said. “We have a lot of work to do before we fully restore the state’s fiscal integrity. We still need to enact reforms that bring down the cost of government, make the state friendlier to job creators, and ignite our state economy so it grows faster than government spending.”

The bulk of the FY19 plan was laid out months ago when the Governor gave his budget address to the General Assembly on Valentine’s Day. It was there that he framed his chief goals for the upcoming fiscal year: spending within our means, and no new taxes.

"This balanced budget was a bipartisan compromise that contains no new taxes and includes full year funding with appropriations for those who rely upon us - schools, universities, corrections, seniors, families, children and the underprivileged," House Republican Leader Jim Durkin said. "I have always said we can achieve great things when we respect the priorities and principles of our counterparts, and with this new framework I look forward to accomplishing more reforms for the state of Illinois."

"This year's balanced budget is the result of bipartisan negotiations," said Rep. Tom Demmer. "It's a realistic and workable plan that supports schools, social services, and critical programs that serve the people of Illinois. However, our work isn't done. We still need to push for real reforms that will improve our economic outlook and provide more opportunities and jobs for families across Illinois."

The General Assembly adopted many of the Governor’s key agenda items. He listed some of them during a press conference attended by legislative leaders, sponsors and budget negotiators.

Blocked New Spending. Rauner and the Republican leaders staved off $1 billion in spending increases by aggressively managing agency budgets and tabling $500 million in spending increase proposals. That’s a billion and a half dollars in much-needed spending restraint.

Education Funding. The budget fully funds the new evidence-based formula the administration introduced in 2015 and signed into law last summer. There’s $350 million in new K-12 dollars, which is up $1.4 billion since 2015, and $50 million for Early Childhood Education, which is up $200 million since 2015. AIM HIGH scholarships get $50 million to encourage Illinois high grads to attend Illinois universities. The MAP grant program is funded for four years. Colleges get $25 million of new money and the tuition tax credit program stays intact.

Pension Reform. The legislature addressed pension costs by making some modest reforms that will reduce long-term liabilities and save $445 million this year.

Adoption Tax Credit. Rauner said he was “particularly proud” of the work on his measure to create tax credits to encourage more adoptions by Illinois parents. Parents who can provide stable, loving homes for needy children can qualify for tax credits up to $5000 per child.

Illinois Innovation Network. The budget gives the University of Illinois System $500 million to fund the Governor’s signature economic development program. The initial step is to get the Discovery Partners Institute up and running. DPI envisions a research and business public-private partnership that involves the entire Illinois university system and business innovators. U of I System estimates that the effort could spark $4 billion in annual invested capital for Illinois and create hundreds of thousands of jobs.

Quincy Veterans’ Home. There is $53 million in FY19 budget to get underway with the administration’s plan to construct a new veteran’s home in Quincy.

Here's what some of our members had to say:
"This budget is good for the people of Illinois," said Rep. Patti Bellock. "We achieved our main priorities of a full-year balanced budget and no tax increase. This budget also meets our strong commitment to mental health and combating opioid, alcohol and substance abuse addiction.”

"The pension reforms included in this budget will offer serious savings to Illinois taxpayers for years to come," said Rep. Mark Batinick. "But this should be just the first in a number of steps that we must take to address the skyrocketing pension debt at all levels of government in Illinois. Only then will we be able to properly invest in programs that we need while providing much-needed tax relief to taxpayers and businesses across the state."

“This budget is good for Illinoisans from Chicago and East Dubuque in the north to Cairo in the south, and from Quincy in the west to Danville in the east,” said Rep. Randy Frese, “and especially for Quincy and the Illinois Veterans Home for which Gov. Rauner has been a true champion during his tenure in office."

The budget was contained in two separate bills. HB 109 appropriates the $38.5 billion contained in the State’s general funds spending plan for FY19. HB 3342, the FY19 Budget Implementation (BIMP) bill, contains changes to the State’s statutory laws necessary to enable the State’s spending to be carried out within the overall $38.5 billion framework.

A major credit rating house, Standard & Poor’s, followed up on the budget enactment by reaffirming Illinois’s investment-grade credit rating. The two bills represented the first bipartisan, balanced budget enacted by Illinois in 15 years. Both HB 109 and HB 3342 were approved by final action of the House and sent to the Governor for signature. HB 109 (now P.A. 100-586) was approved by a vote of 97-18-00, and HB 3342 (now P.A. 100-587) was approved by a vote of 100-14-0. Both votes took place on Thursday, May 31. The two budget bills were signed into law on Monday, June 4.

GENERAL ASSEMBLYHouse adjourns 2018 spring session. Following more than four months of committee and floor action, the Illinois House adjourned on Thursday, May 31. This was the second and final main session of the 100thGeneral Assembly, which was sworn into office in January 2017. As of May 31, the House members of the 100thGeneral Assembly have sponsored 5,913 bills and 1,166 resolutions. In addition, state senators have sponsored more than 5,000 bills and resolutions. Many of these bills have been passed by both houses and sent to the Governor to become law.

The House and Senate look forward to returning to Springfield on Tuesday, November 13 for Veto Session, which is the six-day period set aside for consideration of the Governor’s vetoes of bills passed by both houses. In addition, committees and task forces of lawmakers will continue working throughout the summer and fall, and will hear witnesses offer testimony and guidance on key and ongoing State issues.

“The effects of a sexual assault can last a lifetime, particularly when the victim is a child,” said Rep. Unes. “Survivors, especially children, deserve specialized care that treats their physical wounds and those that cannot be seen as easily. This legislation is the result of more than a year of negotiations, and I appreciate leadership and advocacy for survivors. I urge the governor to sign this critical legislation.”

Access to pediatric sexual assault nurse examiners (SANEs) and physicians is extremely limited—particularly in downstate rural areas--and this bill seeks to address that. House Bill 5245 sponsored by State Rep. Mike Unes, will ensure that pediatric sexual assault victims are able to receive timely care from health care professionals who specialize in providing treatment for children victimized by sexual assault.

Throughout this process, Rep. Unes has worked closely with hospitals, law enforcement entities, the Attorney General’s office, and local physicians in an effort to carefully craft what promises to be landmark legislation for the entire State of Illinois.

Rep. Unes added, “My goal of this potential new law is to give a voice to the voiceless and ensure that this most vulnerable population is cared for by the most qualified medical professionals.”

The House voted unanimously to concur with Rep. Unes’ legislation which also passed unanimously by the Senate. HB 5245 is now headed to the Governor’s desk for his signature to become law.

ENERGY/ENVIRONMENTUnder recently signed settlement, coal pollution controls to be fitted to Illinois generating plants. Generating plants that are affected by the NRG/Midwest Generation legal settlement include plants in Romeoville, Waukegan, and Powerton near Pekin in Downstate Illinois. The Illinois Environmental Protection Agency (IEPA) is a party to the May 2018 settlement agreement. Holding company NRG – the owner of the Midwest generation fleet of generating plants – has stated that it has invested more than $500 million to modernize and add environmental controls to its Illinois assets.

In line with overall changes in the U.S. electric generating industry, some former Illinois coal-burning plants, such as a turbine complex in Joliet, have been converted to cleaner-burning natural gas. Several former coal-burning plants located in population-density areas, such as Chicago’s Crawford/Little Village and Fisk/Pilsen, have been shut down. As the electricity generating market changes, increasing shares of the electricity load are taken up by new natural gas plants and by “green” power sources such as wind farms.

EQUAL RIGHTS AMENDMENTIllinois House passes ERA. The Equal Rights Amendment (ERA) was proposed by both houses of Congress in 1972, and submitted for ratification by three-fourths of the 50 states. Congress attached language to the proposed amendment, to clarify that the amendment must be ratified by 38 U.S. states within a seven-year “window” or it would die. By 1979, however, only 35 states had ratified the ERA, and in the view of many observers at the time the amendment died. Illinois was one of the states that did not ratify the amendment.

By May 2018, the legal status of the ERA had become even more unclear than its situation upon the seven-year mark in 1979. One additional state, Nevada, had ratified the ERA after the 1979 deadline, and five states had rescinded their ratifications. It was thus unclear whether the number of states that had ratified the ERA was 30, 35, or 36. Opponents of this year’s ERA vote included pro-life and religious rights groups. They were united in their belief that the amendment’s life has expired. The House vote on SJRCA 4, taken on Wednesday, May 30, 2018, was 72-45-0. This tally reached the General Assembly’s three-fifths majority needed to ratify a constitutional amendment; but for reasons including those set forth here, it was not clear whether this vote ratified the amendment or not.

LAW ENFORCEMENTHouse approves language to allow the use of police drones to surveil large-scale events. Public events eligible for surveillance are events with more than 1,500 people. The police drones will have the ability to take images of a crowd and to return the images to law enforcement for scrutiny. Police in Chicago and elsewhere has asked for this right in order to keep their communities safe from terrorism and mass shootings. In some cases, drone footage could be used to rapidly identify a person of interest. Law enforcement authorities will have the right to retain drone footage for up to 30 days. The police drone bill, SB 2562, was approved by the House by a vote of 74-35-0 and is on the Order of Concurrence in the Senate.

PENSION REFORMGeneral Assembly enacts partial pension reform. One of the largest long-term challenges facing the State is the presence of unfunded pension liabilities in State-managed pension funds. The size of these liabilities, which cover pension payments promised to teachers and other public-sector professional workers, cannot be precisely determined at this time because it is based on future interest rates and prudent anticipated future rates of return on the funds already invested. Based on current estimates of future rates of return, the unfunded pension liabilities of the State and its taxpayers are in excess of $130 billion. $71 billion of this underfunding reflects commitments made by the Teachers’ Retirement System of Illinois.

In the spring 2018 session, the State took significant actions to delineate and reduce the unfunded liabilities on the books of the Teachers Retirement System (TRS) and State Universities Retirement System (SURS). Legislation passed on a bipartisan basis by both houses will reduce these liabilities in two ways. Firstly, school districts will no longer be able to pass on to the State the cost of “spiking” end-of-career educator salary hikes, which are the salary levels on which pension payments are based, at a rate that is higher than the current rate of inflation. Under the 2018 pension reform plan, the State-pension-liable portions of the salaries paid to educators by school districts cannot increase at a rate faster than 3%. Pension costs generated from salary increases greater than 3% must be borne by the school or university that granted the salary hike.

Secondly, the State has committed itself to inaugurating a new program to buy out part or all of the future pension benefits to be paid out in future years to active and inactive vested public sector workers. Under this proposal, vested public-sector workers – especially workers who are enrolled in pre-2011 “Tier I” pension plans – will be given the chance to take a buyout of a segment of their pension benefits. Workers who make the decision to accept a buyout will have the chance to enjoy a substantial cash payout that could be reinvested in ways the eligible vested person desires.

SEXUAL HARASSMENTNew law brings independence, transparency to legislative sexual harassment investigations. HB 138, approved by both houses of the General Assembly and signed into law by the Governor on Friday, will close loopholes in existing law, especially with relations to the Illinois General Assembly, on issues of sexual harassment. The bill makes the office of Legislative Inspector General a full-time position, lengthens the window of time within which a survivor of sexual harassment may file a complaint with the Illinois Department of Human Rights, toughen harassment training for Illinois state legislators and their staff, requires annual reporting of sexual harassment reports, and makes other changes.

“These protections are the result of numerous hearings and dozens of hours of testimony from victims and others. We must make changes to ensure that everyone who works at the Capitol in Springfield or in any public service job in Illinois is safe from harassment, intimidation, or unwanted sexual advances,” said State Rep. Sara Wojcicki Jimenez, who serves as the minority spokesperson on the Illinois House Sexual Harassment and Discrimination Task Force.

A full list of all of the reforms included in the bill can be found here.

“These improvements represent an important first step, but there is much more work to do,” Representative Jimenez said. “Our Task Force will continue to meet throughout the summer to work toward agreements on additional protections.”

TAXESHouse Democrats pass tax-hike resolution supporting a graduated income tax. HR 1025 was adopted 61-52-0, with House Republicans voting unanimously in opposition. Opponents pointed out that as a resolution that does not amend the flat-tax mandate in the Constitution of Illinois, HR 1025 was pure political posturing with no legally-binding impact. The resolution was adopted on Tuesday, May 29.

Illinois has the highest effective state and local tax burden in the nation – driven largely by some of the nation’s highest local property and sales tax rates. The consequences of this tax burden are evident through families leaving Illinois in droves – Illinois had a net loss of more than 874,000 residents from 2007 – 2016.

Instead of addressing the high tax burden and trying to reverse the decade-long trend of out-migration of Illinois residents, House Democrats’ and Speaker Madigan’s plan is to raise taxes even higher.

They are proposing an “Unfair Tax”, a graduated income tax, to force middle class Illinois families and small businesses to fork over even more of their hard-earned money to the State.

We need to be growing our economy by creating new, good paying jobs. The only way to do that is by being competitive with our neighbors and creating an environment of certainty for businesses to invest here.

An “Unfair Tax” would do the complete opposite – it would introduce a new level of uncertainty for families and businesses by making tax brackets subject to change at the whim of the legislature and Governor from year to year. And it would add to our already highest state and local tax burden in the nation.

TOBACCO 21General Assembly passes bill to raise tobacco purchase age from 18 to 21.SB 2332 will phase out the current ability of Illinoisans aged 18, 19, and 20 to buy cigarettes, chewing tobacco, rolling tobacco, and other tobacco products in Illinois. Persons of this age who have drivers’ licenses are already required by law to carry distinctive license identification cards as part of the universal practice of “carding” adults when they buy alcohol. The House vote was 61-49-1 on Wednesday, May 30. The bill had already been passed by the Senate and now goes to the Governor for final action.

TRANSPORTATIONGov. Rauner announces $11 billion State infrastructure plan. Gov. Bruce Rauner has announced a plan to invest $11.05 billion in the state's roads and bridges over the next six years, including $2.2 billion of state and federal funding in the upcoming fiscal year. The Illinois Department of Transportation Multi-Year Proposed Highway Improvement Program will focus on projects that provide the greatest economic benefit to communities and take advantage of long-term strategies that save money over time.

"Investing in transportation creates jobs and economic opportunity, improves safety and makes Illinois a better place to raise a family," Rauner said. "This plan will make Illinois more competitive while protecting the interests of the taxpayers."

The governor announced the plan's release at Peoria's McClugage Bridge at eastbound U.S. 150, which will be replaced in 2019 at a cost of $205 million with the completion of the final design this year. Based on current funding levels, the FY2019-2024 Proposed Highway Improvement Programaims to improve a total of 1,945 miles of miles of road and 525 bridges maintained by the state. The multi-year program also includes funding for upgrades to more than 750 miles of local roads and 922,933 square feet of local bridges.

Other plan highlights include:

$26 million toward the reconstruction of U.S. 20/Rockford Bypass in Rockford

$36 million to replace and repair the Third Street exit and ramps to Martin Luther King Drive in East St. Louis

$12.7 million for additional lanes on 4.5 miles of Interstate 57 from Johnson City to West Frankfort

$148.4 million for bridge work and other improvements on Interstate 80 through Will County

This multiyear plan is the Illinois Department of Transportation's (IDOT) first to embrace asset management strategies that commit to smaller repairs avoiding the higher costs of deferred maintenance. Using this approach, IDOT will realize savings over multiple years to eventually invest in other projects throughout the state. The plan also builds upon the latest in data-driven tools to help identify projects that provide the most value to the public while improving quality of life and regional mobility.

Multiple announcements show progress made on Illinois freight, infrastructure projects. The primary announcement made by Gov. Bruce Rauner was the receipt of $142 million in federal financing to underwrite the 75thStreet Corridor Improvement Project, a program to build a new railroad flyover, road underpass, junction replacement, new grade separations, and new track age. The Corridor is scheduled to comprehensively rebuild and revamp a section of track age on Chicago’s South Side that currently includes several busy at-grade crossings where trains have to wait for each other.

Federal help for the 75thStreet Corridor makes this project one of the largest single Illinois-project recipients of discretionary grant money in the history of the U.S. Department of Transportation. The Corridor project is part of the CREATE Program, a multi-agency project to unsnarl and speed up railroad logistics throughout greater Chicago. In the Corridor section of Chicago railroad track age, trains have had to wait for each other to pass through since Abraham Lincoln’s day. More than 2 million freight cars pass through the Corridor annually.

In addition to this announcement, Gov. Rauner also announced the completion of a financing package to invest $241 million in overall Illinois freight mobility. The investments will rebuild a key Interstate highway interchange near Joliet, separate train and road traffic at a choke point near Decatur, deploy a truck parking-availability app, and make many other improvements that are part of the current Illinois State Freight Plan. The State Freight Plan is a multiyear program within IDOT to create jobs by renewing and expanding Illinois’s system of freight infrastructure. IDOT operates approximately 2,185 miles of Interstate highways, which are used to move more than 664 million tons of annual freight traffic each year.

VETERANSGeneral Assembly places construction of new Quincy Veterans Home on fast track. The original Quincy Veterans Home, a skilled-nursing-care facility set aside for exclusive use by Illinois veterans and their spouses, was built in 1886 to house veterans of the American Civil War. The facility is reaching the end of its useful life and its plumbing system is failing. Some of the residents have fallen ill, and some have died, from the bacterium “Legionella” that can live in older pipes and HVAC systems. In a two-pronged process, SB 3128 provides for immediate remediation of the continuing problems at the existing Veterans Home, including the digging of a new well for clean water. At the same time, SB 3128 starts a fast-track process to construct a completely new Veterans Home at Quincy. The bill contains procurement language intended to make sure that the design and building of the new Home start as soon as possible. The House vote on Thursday, May 31 was 110-3-0.

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